The Associated Press provides details on the cigarette tax increase that takes place today. The AP reports,

Tobacco companies and public health advocates, longtime foes in
the nicotine battles, are trying to turn the situation to their
advantage. The major cigarette makers raised prices a couple of
weeks ago, partly to offset any drop in profits once the per-pack
tax climbs from 39 cents to $1.01. Medical groups see a tax increase right in the middle of a
recession as a great incentive to help persuade smokers to quit.

Tobacco taxes are soaring to finance a major expansion of health
insurance for children. President Barack Obama signed that health
initiative soon after taking office. Other tobacco products, from cigars to pipes and smokeless, will
see similarly large tax increases, too. For example, the tax on
chewing tobacco will go up from 19.5 cents per pound to 50 cents.
The total expected to be raised over the 4 1/2 year-long health
insurance expansion is nearly $33 billion. . . .

The tax increase is only the first move in a recharged
anti-smoking campaign. Congress also is considering legislation to
empower the Food and Drug Administration to regulate tobacco. That
could lead to reformulated cigarettes. Obama, who has agonized over
his own cigarette habit, said he would sign such a bill. . . .

About one in five adults in the United States smokes cigarettes.
That's a gradually dwindling share, though it isn't shrinking fast
enough for public health advocates. The Centers for Disease Control and Prevention says cigarette
smoking results in an estimated 443,000 premature deaths each year,
and costs the economy $193 billion in health care expenses and lost
time from work. Smoking is a major contributor to heart disease,
cancer and lung disease. . . . .

Philip Morris USA, the largest tobacco company and maker of
Marlboro, is forecasting a drop, but spokesman Bill Phelps said he
cannot predict how big. Philip Morris raised Marlboro prices by 71
cents a pack early this month, and prices on smaller brands by 81
cents a pack. Other major companies followed suit. The pricing moves raised eyebrows. "That's nothing more than
greed," said Kevin Altman, an industry consultant who advises
small tobacco companies. "They weren't required to charge that
until April 1. They are just putting that into their pockets." Responded Phelps: "We raised our prices in direct response to
the federal excise tax increase, and people who are upset about
that should find out how their member of Congress voted, and
contact him or her."

Some policy analysts have questioned the wisdom of boosting
tobacco taxes to finance health care for children. They argue that
the fate of such a broad program should not depend on revenues
derived from a minority of the adult population, many of whom have
low incomes and are hooked on a habit. The tobacco industry is also
warning that the steep increase will lead to tax evasion through
old-fashioned smuggling or by Internet purchase from abroad. . . .